USD/CAD plummets to lows, below mid-1.3300s on Canadian CPI
|- The Canadian Dollar gets a boost from hotter-than-expected consumer inflation data.
- The USD weighed down by Fed rate cut bets despite a pickup in the US bond yields.
- Further downside is likely to remain limited ahead of the latest FOMC policy decision.
The USD/CAD pair finally broke down of its daily consolidative trading range and dropped to fresh weekly lows, below mid-1.3300s post-Canadian inflation figures.
The pair extended the previous session's retracement slide from 1-1/2 week tops, levels beyond the 1.3400 handle, with a combination of factors exerting some pressure for the second consecutive session on Wednesday.
Despite a goodish pickup in the US Treasury bond yields, the US Dollar failed to attract any buying interest and remained on the defensive amid increasing bets for an eventual Fed rate cut action by the end of this year.
On the other hand, the Canadian Dollar got a boost following the release of hotter-than-expected domestic consumer inflation figures, showing that the headline CPI held steady at 0.4% in May vs. a dip to 0.2% expected.
Adding to this, the yearly rate climbed more than expected to 2.4% as against 2.1% anticipated, while BoC's core CPI - at 0.4% and 2.1% on monthly and yearly basis respectively also surpassed consensus estimates.
The further downside, however, is likely to remain limited as the focus remains on the next big event risk - the latest FOMC monetary policy update, due to be announced later during the US trading session.
Technical levels to watch
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